Wojciech Slowinski @TrendingStocks: "Gold’s ( $GOLD or $GLD..."

Poland

Gold’s ( $GOLD or $GLD (SPDR Gold) ) sharp over 5% one-day decline this week—the steepest in 12 years—sent shockwaves through markets, but it doesn’t yet signal a collapse in my opinion. Despite the dramatic drop, gold remains a top performer in 2025, still outpacing both the S&P 500 $SPX500 or $SPY (State Street SPDR S&P 500 ETF)) and Bitcoin ( $BTC ) . The broader rally has been powered by fears of debasement—the belief that inflation, loose monetary policy, and expanding fiscal deficits are eroding the real value of fiat currencies, particularly the US dollar. Search and media trends confirm a surge in “debasement” narratives, reflecting investors’ anxiety about persistent inflation and government overspending. Yet, paradoxically, long-term US Treasury yields have fallen in last few days below 4%, suggesting that bond markets are not pricing in severe inflation risk. Historically, gold’s bull runs—such as those in 1980 and 2011—ended amid intense volatility and fading panic. The current cycle mirrors 2011 more than 1980, with gold rising even alongside a buoyant equity market. Analysts point to structural demand from foreign central banks, possibly shifting reserves from US Treasuries into gold, and accelerating purchases by Chinese investors as key drivers (please see the graph by Bloomberg below showing data on Chinese gold warrants — certificates that indicate the holder has physical gold in a warehouse recognized by the Shanghai Futures Exchange). As of now I think Tuesday’s plunge appears to be a sharp correction within an extended bull phase—less a reversal of fundamentals than an emotional reaction to an overheated narrative that I discussed in my previous post. I used recent rally to sell small portions of my gold and silver holdings but on the other hand I used recent weakness to buy back some silver ( $SILVER or $SLV (iShares Silver Trust) ). Interestingly investment banks continue to ‘follow’ the precious metalls rally with increased forecasts. Goldman Sach’s commodities strategist Lina Thomas last week said: “We expect gold to reach $ 4,900 by the end of 2026, driven by continued central bank buying and renewed investor demand on the back of Fed cuts—but there could be significant upside beyond those levels.” Bank of America analysts went slightly further last week after gold • surpassed its previous $ 4,000 forecast : “We see the risk of a correction near-term, but still expect further upside in 2026, with gold potentially rising to $ 5,000/oz.”